Company to Host Quarterly Conference Call at 5:00 P.M. ET on November 6, 2024 and Announces their 2024 Virtual Investor Day at 11:00 A.M. ET on December 4, 2024
The information in this press release should be read in conjunction with an earnings presentation that is available on the Company's website at investors.amcoastal.com/Presentations.
ST. PETERSBURG, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- American Coastal Insurance Corporation (Nasdaq: ACIC) ("ACIC" or the "Company"), a property and casualty insurance holding company, today reported its financial results for the third quarter ended September 30, 2024.
| ($ in thousands, except for per share data) | Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||
| Gross premiums written | $ | 93,016 | $ | 93,986 | (1.0)% | $ | 507,066 | $ | 507,449 | (0.1)% | ||||||
| Gross premiums earned | $ | 160,178 | $ | 157,777 | 1.5% | $ | 475,898 | $ | 445,589 | 6.8% | ||||||
| Net premiums earned | $ | 74,486 | $ | 50,264 | 48.2% | $ | 200,498 | $ | 212,919 | (5.8)% | ||||||
| Total revenue | $ | 82,136 | $ | 52,532 | 56.4% | $ | 217,390 | $ | 213,149 | 2.0% | ||||||
| Income from continuing operations, net of tax | $ | 27,669 | $ | 15,015 | 84.3% | $ | 70,451 | $ | 67,824 | 3.9% | ||||||
| Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | 110.1% | $ | 321 | $ | 227,803 | NM | ||||||
| Consolidated net income | $ | 28,119 | $ | 10,568 | 166.1% | $ | 70,772 | $ | 295,627 | (76.1)% | ||||||
| Net income available to ACIC stockholders per diluted share | ||||||||||||||||
| Continuing Operations | $ | 0.56 | $ | 0.34 | 64.7% | $ | 1.43 | $ | 1.54 | (7.1)% | ||||||
| Discontinued Operations | $ | 0.01 | $ | (0.10) | 110.0% | 0.01 | 5.19 | (99.8)% | ||||||||
| Total | $ | 0.57 | $ | 0.24 | 137.5% | $ | 1.44 | $ | 6.73 | (78.6)% | ||||||
| Reconciliation of net income to core income: | ||||||||||||||||
| Plus: Non-cash amortization of intangible assets and goodwill impairment | $ | 610 | $ | 812 | (24.9)% | $ | 2,031 | $ | 2,436 | (16.6)% | ||||||
| Less: Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | 110.1% | $ | 321 | $ | 227,803 | NM | ||||||
| Less: Net realized gains (losses) on investment portfolio | $ | (3) | $ | 4 | NM | $ | (124) | $ | (6,787) | 98.2% | ||||||
| Less: Unrealized gains on equity securities | $ | 1,543 | $ | 177 | NM | $ | 1,542 | $ | 792 | NM | ||||||
| Less: Net tax impact (1) | $ | (195) | $ | 133 | NM | $ | 129 | $ | 1,771 | (92.7)% | ||||||
| Core income (2) | $ | 26,934 | $ | 15,513 | 73.6% | $ | 70,935 | $ | 74,484 | (4.8)% | ||||||
| Core income per diluted share (2) | $ | 0.54 | $ | 0.35 | 54.3% | $ | 1.44 | $ | 1.70 | (15.3)% | ||||||
| Book value per share | $ | 5.38 | $ | 2.78 | 93.5% | |||||||||||
| NM = Not Meaningful | ||||||||||||||||
| (1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the 21% federal corporate tax rate. | ||||||||||||||||
| (2) Core income and core income per diluted share, both of which are measures that are not based on GAAP, are reconciled above to net income and net income per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section, below. | ||||||||||||||||
Comments from Chief Executive Officer, Dan Peed:
"Foremost, American Coastal is committed to helping and responding to those who were impacted by Hurricanes Debby, Helene and Milton. Having so many associates impacted by the storms, we understand the requirement for, and expectation of, exceptional customer service. Two of American Coastal's core values are collaboration and resiliency, and I am proud that our associates embody these values in the wake of devastating storms that impacted so many.
Our performance this quarter reflects these core values and the strength of our underwriting discipline and the focus on protecting American Coastal from outsized exposure. We continue reporting increased returns on equity and combined ratios lower than 60%. For the third quarter, our total revenue was $82.1 million, a 56% increase year-over-year.”
Return on Equity and Core Return on Equity
The calculations of the Company's return on equity and core return on equity are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Income from continuing operations, net of tax | $ | 27,669 | $ | 15,015 | $ | 70,451 | $ | 67,824 | ||||
| Return on equity based on GAAP income from continuing operations, net of tax(1) | 55.3% | 177.9% | 46.9% | 267.9% | ||||||||
| Income (loss) from discontinued operations, net of tax | $ | 450 | $ | (4,447) | $ | 321 | $ | 227,803 | ||||
| Return on equity based on GAAP income (loss) from discontinued operations, net of tax(1) | 0.9% | (52.7)% | 0.2% | NM | ||||||||
| Consolidated net income | $ | 28,119 | $ | 10,568 | $ | 70,772 | $ | 295,627 | ||||
| Return on equity based on GAAP net income (1) | 56.2% | 125.2% | 47.1% | NM | ||||||||
| Core income | $ | 26,934 | $ | 15,513 | $ | 70,935 | $ | 74,484 | ||||
| Core return on equity (1)(2) | 53.8% | 183.8% | 47.3% | 294.2% | ||||||||
| (1) Return on equity for the three and nine months ended September 30, 2024 and 2023 is calculated on an annualized basis by dividing the net income or core income for the period by the average stockholders' equity for the trailing twelve months. | ||||||||||||
| (2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income, which is reconciled on the first page of this press release to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the "Definitions of Non-GAAP Measures" section below. | ||||||||||||
Combined Ratio and Underlying Ratio
The calculations of the Company's combined ratio and underlying combined ratio on a consolidated basis and attributable to Interboro Insurance Company ("IIC"), now captured within discontinued operations, are shown below.
| ($ in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
| September 30, | September 30, | |||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
| Consolidated | ||||||||||||
| Loss ratio, net (1) | 15.8% | 19.5% | (3.7) pts | 19.7% | 18.8% | 0.9 pts | ||||||
| Expense ratio, net (2) | 41.9% | 43.2% | (1.3) pts | 38.9% | 42.4% | (3.5) pts | ||||||
| Combined ratio (CR) (3) | 57.7% | 62.7% | (5.0) pts | 58.6% | 61.2% | (2.6) pts | ||||||
| Effect of current year catastrophe losses on CR | 6.6% | 9.7% | (3.1) pts | 2.6% | 6.2% | (3.6) pts | ||||||
| Effect of prior year favorable development on CR | (1.8)% | (6.2)% | 4.4 pts | (1.2)% | (5.2)% | 4.0 pts | ||||||
| Underlying combined ratio (4) | 52.9% | 59.2% | (6.3) pts | 57.2% | 60.2% | (3.0) pts | ||||||
| IIC | ||||||||||||
| Loss ratio, net (1) | 63.5% | 71.1% | (7.6) pts | 70.4% | 83.1% | (12.7) pts | ||||||
| Expense ratio, net (2) | 35.8% | 51.1% | (15.3) pts | 42.2% | 56.6% | (14.4) pts | ||||||
| Combined ratio (CR) (3) | 99.3% | 122.2% | (22.9) pts | 112.6% | 139.7% | (27.1) pts | ||||||
| Effect of current year catastrophe losses on CR | 4.7% | 17.2% | (12.5) pts | 5.3% | 13.5% | (8.2) pts | ||||||
| Effect of prior year favorable development on CR | (6.0)% | (4.4)% | (1.6) pts | (4.7)% | (3.4)% | (1.3) pts | ||||||
| Underlying combined ratio (4) | 100.6% |
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